Some 2.5 million (16%) of all mortgage holders have never changed their mortgage product, according to new research from YouGov and digital mortgage broker habito.
And shockingly that figure rised to almost a quarter (23%) of those aged 55 or over whilst a further 1 in 4 (26%) have not changed for over five years.
Even in the event that there were clear financial savings on offer, 1 in 4 (24%) said there is no interest rate reduction that would make them consider going back through the application process again.
Daniel Hegarty, CEO and founder of habito, said: “A revolution is coming in the way people find, apply for and manage their mortgage. The conventional application process is out of date and stressful, because there has been zero technological innovation in this space in the last 20 years. The fact that people are willing to potentially handover hundreds, if not thousands, more than they need to, rather than re-apply is a shocking indictment of the state of the service they are receiving.
“Technology is the only way to bring mortgages into the 21st century. We’re seeing a new breed of digital mortgage brokers emerge who use software to help people find the right mortgage and apply for it in as little as 30 minutes online, totally paper-free.”
Research from HSBC found that more than 1.9 million people feel “overwhelmed” by the process of getting a mortgage, while a shocking 6% of mortgage holders, equivalent to over 850,000 people, say it was the most stressful experience of their life. The national aversion to switching mortgages is estimated to cost UK consumers £29bn.
The stresses that come with applying for a mortgage are so acute that almost half (49%) of mortgage holders – or over 7 million people – say they would need to secure at least a 1% reduction in the interest rate on their mortgage in order switch; 14% say they would need the reduction to be as high as 3% as a minimum.